AAMC Reporter: August 2008
Medical Fundraisers Pound the Pavement
For medical schools and teaching hospitals, now may be
the time to get creative with fundraising. As government
funding grows more unstable and construction and
research endeavors—not to mention health care itself—come with ever-heftier price tags, using private sources to
boost the bottom line may be more important than ever.
"The funding sources our institutions historically rely on
are shrinking," said Chris Tucker, M.B.A., executive secretary
for the AAMC's Group on Institutional Advancement.
"Really, the only major revenue stream that is not
constricting is philanthropic dollars."
Medical institutions are having difficulty finding the funds
to support their missions these days, according to Tucker.
Building costs are rising as research centers crop up around
the country, said Martin Grenzebach, chair of Grenzebach
Glier and Associates, Inc., a Chicago-based philanthropic
management consulting company. Teaching hospitals' net
margins have decreased in the managed care era. State and
federal agencies have trimmed various budget allocations
for medical centers. Limited funding for the National
Institutes of Health (NIH), Tucker said, is especially troubling.
Although subcommittees in both the House and
Senate have proposed NIH budget increases that would
match biomedical inflation for the coming years, the
agency's budget has experienced limited growth for five
years and, when adjusting for inflation, has actually been
in decline. This funding trend carries grave consequences
for research.
"The funding sources our institutions historically rely on
are shrinking. Really, the only major revenue stream that is not
constricting is philanthropic dollars."
—Chris Tucker, M.B.A., executive secretary
for the AAMC's Group on Institutional Advancement |
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Taken in aggregate, these and other changes are making
medical centers turn to private donors—namely, foundations,
corporations, and individuals—to secure monies
for their programs.
The data show that many institutions are finding success.
The recently released 2007 AAMC Development
Survey revealed that the average total private support of
responding institutions doubled in the past seven years,
from$25.3million in 2000 to $51.1million in 2007. Over
the past year alone, total private support among survey
respondents increased by about 27 percent. This year's
survey compiled philanthropic data from 52 medical
schools, 24 teaching hospitals, and 46 joint programs,
and found more than half of these institutions are in the
midst of a fundraising campaign with a $300million
median goal.
One reason for this recent success may be a much-discussed"
intergenerational transfer of wealth"—that is, the
phenomenon beginning to occur as baby boomers inherit
and then donate money from their parents, Tucker said.
New foundations—whether corporate, private, or personal—
have been created because of this wealth transfer.
As a result, medical institutions are paying attention.
Medical centers are finding unique challenges and
opportunities in this fundraising environment. Basic science
research, for example, remains somewhat difficult to
fund because "grateful patients," or those who donate to
an institution because of a positive care experience there,
tend to give to specific, disease-related clinical initiatives,
Tucker said. In other words, many grateful patients
and other donors may not understand the significance of
basic science and how it translates to discovery.
At the same time, today's donors are putting more restrictions
on how they want their gifts to be allocated.
"To some extent, this is generational,"Grenzebach said.
"Younger donors want to solve a problem; they want to
find a cure. They are much more engaged in the programs
that they helped move forward."
These realities put clear and effective communication
strategies at the heart of many fundraising campaigns.
And medical schools are cultivating a new breed of leader
to oversee these strategies. Sometimes known as chief
development officers (CDO), these staff members have
more on their plate than in years past. Now, CDOs or
their equivalents manage much bigger development
offices with larger staffs and more fundraising projects.
Arguably one of the biggest responsibilities that some
development leaders now face is working with their institutions
to implement innovative fundraising strategies.
The development office at New York City's Rockefeller
University, a small research center with fewer-than-average
numbers of alumni and grateful patients, recently
created "affinity groups," in which demographically similar
people (women, parents, etc.) are gathered together
to learn how Rockefeller works to advance certain general
issues, like childhood development or HIV/AIDS
research. This allows prospective philanthropists to see
how their donations could advance personally important
causes, and how basic science research ties back to
pressing medical issues.
One affinity group is DirectEffect, which focuses on
HIV/AIDS research. Since it was founded in 1993, the
group has raised about $8 million and introduced 2,000
people to Rockefeller's HIV/AIDS research projects.
"Ninety percent of [donor] cultivation is education," said
Maren E. Imhoff, Rockefeller's vice president for development.
"Through affinity groups, [people] learn more
about biomedical research. Over time, as they get more
educated about basic science discoveries, they take an
interest in supporting research here."
Having faculty who can explain research initiatives to
a lay audience is another important ingredient.
"You have to make the talks shorter than usual, allow
a lot of time for questions, and define your terms," said
Thomas P. Sakmar, M.D., head of Rockefeller's molecular
biology and biochemistry laboratory.
Boston-based Brigham and Women's Hospital (BWH)
launched a program in October 2006 to help physicians
and scientists sharpen their development skills.
Known as the Physician and Scientist Fundraising
Program (PSFP), this initiative includes a series of
seminars designed to teach faculty how to promote
their work to general-knowledge audiences.
There are many strategies that can help faculty, said Patty
Hill-Callahan, interim CDO at BWH, including timing.
"We encourage physicians to identify donors quickly,"
said Hill-Callahan. "The further away potential donors
are from their grateful patient experience, the less likely
they are to give."
So far, the program has educated 130 faculty members,
with more events scheduled for later this year.
Understanding that basic scientists are not as connected
to potential philanthropists, BWH hired a development
officer for its Biomedical Research Institute about two
years ago. This new position, according to Hill-Callahan,
showcases various research initiatives to interested individual
and foundation donors.
When an institution changes its makeup, creative fundraising
techniques may also become available. The University
of Miami Leonard M. Miller School of Medicine realized
this last year when it purchased the former Cedars Medical
Center, now known as University of Miami Hospital.
Marsha P. Kegley, associate vice president for medical
development and alumni relations at Miami's medical
school, said that the acquisition has opened doors.
"People love giving to hospitals," she said. "They understand
funding for patient care."
Plus, there are opportunities for donors to purchase naming
rights to certain parts of the hospital. Within medical
centers, naming rights are an important fundraising
mechanism—approximately 20 medical schools alone
carry philanthropists' names.
Miami Hospital is hiring more hospital development staff
who will collaborate with the medical school's fundraising
team, Kegley said. Even though many opportunities
exist with this purchase, Kegley said there is one big
challenge: The institution must ensure that all of its compartments
work together and do not compete for philanthropists'
dollars.
"Sometimes it can get hairy," Kegley said. "The cancer center may want funding from a particular donor, but we have another center in mind."
University of Central Florida College of Medicine Dean Deborah German, M.D.,
speaks to a crowd of potential donors in the Orlando, Fla., area.
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Communication about how to allocate each donor's gift
is necessary to avoid competition, Kegley said.
Novel fundraising approaches can be particularly necessary
for unique programs. For a school with no students
yet, the University of Central Florida (UCF) College of
Medicine has already made plenty of fundraising waves.
In April, the newly accredited medical school announced
that it will offer full, four-year, $160,000 scholarships for
tuition and living expenses to its first entering class in
fall 2009. Following suit, the Cleveland Clinic Lerner
College of Medicine of Case Western Reserve University
announced in May that its incoming 2008 class will
have free tuition.
Overall, there is evidence that development
offices are becoming more involved in scholarship-related fundraising. Gifts raised expressly for medical
student scholarships by medical schools and joint
programs were up 37 percent in 2007 over 2006, according
to the development survey.
"This means that our first class of students will be able to
focus only on their studies, and not worry about medical
student debt," said Deborah C. German, M.D., UCF's
medical school dean.
But this would not have been possible without fundraising.
German's specific agenda helped motivate community
members to donate, according to Charles Roberts,
assistant vice president for development at UCF's medical
school.
"She [German] kept emphasizing that free tuition had
never been done before, and what it can mean for medical
students," he said.
German stressed that UCF would be a "community medical
school," a positioning that encouraged the Hispanic
Chamber of Commerce of Metro Orlando to pledge
funding for one student's scholarship.
"The economic development this medical school can
offer our community is critical," said Ramon Ojeda,
M.B.A., president of the chamber. "It just makes economic
sense."
—By Elissa Fuchs
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